Minority Contractors Left In Limbo

Afraid Of Lawsuits, Transportation Department Freezes Funding Goals

It's even tougher for minority contractors like herself who must compete against bigger companies that can easily outbid her on highway roadwork.

That's why government-mandated programs that help minority contractors are so important, she says. ''It gets frustrating when there isn't something out there to kind of help you.''

Rimmel and other minority contractors say they are losing substantial business because a program that helps them win jobs with the Florida Department of Transportation remains frozen in limbo.

The DOT has kept its goal of assigning 10 percent of its federally funded roadwork to minority contractors.

But a legal battle prompted the department to discontinue a similar program for state-funded jobs in 1989. The agency says it isn't using the program because it fears future legal challenges and is trying to comply with a 1989 Supreme Court ruling.

Although a state-funded study suggests that minority-owned businesses don't get their fair share of such work, the agency says another study is needed as proof.

Critics say the agency's stance has wasted millions of dollars in opportunities for minority contractors.

''If you are afraid any time you do something that someone is going to sue you, you are not going to get anything done,'' said Jack Perkins, director of the Orlando Minority Business Development Center.

DOT discontinued its minority goal for state-funded roadwork in June 1989, when it became aware that a federal judge in Tallahassee was about to rule against its constitutionality.

The ruling in November 1989 cited a landmark 1989 U.S. Supreme Court decision - Richmond, Va., vs. J.A. Croson Co. - that said such state and local programs were unconstitutional if no prior discrimination has been proven.

Leading the fight against the DOT goal was The Cone Corp., a white-owned general contracting company based in Tampa that had filed the lawsuit in 1988 along with eight other contractors.

But Cone's victory in Tallahassee was a partial one. The company had also challenged a 10 percent goal for DOT projects that used federal funds - the bulk of the DOT's budget. The Tallahassee court ruled in favor of the federal goals, which continue to be used today.

The contractors appealed to the 11th U.S. Circuit Court of Appeals in Atlanta, which in January 1991 dismissed the Cone case. The court said the companies had failed to show they were hurt by the DOT goals.

The contractors appealed again, this time to the U.S. Supreme Court, but in May the court decided not to revive the lawsuit. It gave no reason.

Representatives of The Cone Corp. would not comment on the case.

A Washington group that studies legal issues affecting minority business says the double-rejection of the Cone lawsuit should have paved the way for the reinstatement of DOT goals for state-funded roadwork.

''It is not necessary that the state suspend its program in the absence of a court order,'' said Franklin M. Lee, chief counsel for the Minority Business Enterprise Legal Defense and Education Fund Inc.

Lee said no court has ruled that the agency must disband any of its goals.

The state Transportation Department, however, wants to stand by the Croson ruling.

''I can understand the concern. But this is not a typical kind of case,'' said Thornton Williams, general counsel for the agency.

The appeals court ruling included a warning to the DOT, Williams said. If the contractors had been able to prove they had been hurt by the minority goals, the ruling said, the department would have had to defend its goals under the Croson standard.

''This is the kind of case where they say they didn't get you this time around, but you need to do these things based on the Croson decision if you come back before us,'' Williams said.

Specifically, the agency must prove that minority contractors have historically missed out on their fair share of state-funded roadwork, a task the department is trying to accomplish through the use of disparity studies.

The studies have gained popularity since the 1989 Croson ruling, but Perkins argues they have been more effectively used by white-owned contractors to stall minority goal programs across the country.

''While they are fooling with these studies, there are tremendous losses going on the minority side,'' he said. ''The state has already spent $1 million on disparity studies. How much more of the taxpayers' money are they going to waste?''

Perkins said glaring disparities already exist.

From July 1990 through April 1991, state-funded DOT contracts totaled $121.15 million. Of that, $5.80 million in contracts was handled by disadvantaged minority businesses, or DBEs, the term the department uses for contractors owned by blacks, Hispanics, Native Americans, Asians, Indians or women.

That means less than 5 percent of the roadwork went to DBEs, Perkins said, far less than the 10 percent goal last used by the DOT two years ago.